Two Years, Five Strategies, Continuous Progress: Strategies for Improving the U.S. Payment System Turns Two

As we enter into 2017, it’s hard to believe that it has only been two years since we published Strategies for Improving the U.S. Payment System, our multi-year plan that focuses on end-to-end improvement of the speed, efficiency and security of our country’s payment system. To commemorate another year of substantive industry progress and momentum across the payments industry, the Federal Reserve released a Strategies for Improving the U.S. Payment System – January 2017 Progress Report, which highlights accomplishments as well as plans for 2017.

“The Fed’s priority is to advance improvements that are in the public interest so that consumers and businesses alike have access to efficient, real-time and highly secure payments in the United States,” said Esther George, president and chief executive officer of the Federal Reserve Bank of Kansas City, who is leading the payment system improvement initiatives on behalf of the Federal Reserve “Through a number of collaborative efforts, the industry is making real progress on all fronts and we’re expecting to achieve a number of significant milestones in 2017.”

The progress report details the work-to-date of two payments industry task forces and efforts to enhance payment system efficiency through work on standards, directories and business-to-business payment improvements.

Faster Payments Task Force accomplishments include:

  • Fielded and commissioned an independent assessment of 22 faster payments solution proposals against the Faster Payments Effectiveness Criteria released in February 2016, 19 of which voluntarily progressed through a review by the 500+ participants of the two task forces.
  • Analyzed potential challenges to successful faster payments implementation, focusing on provider interoperability, rules and standards, governance, adoption, safety and security.
  • Today, published part one of a two-part final report that provides a high-level overview of the task force’s background and processes, the payments landscape, and the benefits of faster payments.

Secure Payments Task Force accomplishments include:

  • Launched work to address the industry’s most pressing payment system security issues: identity management, data protection, and fraud and risk information-sharing.
  • Mapped existing identity management practices in end-to-end payment flows in order to identify opportunities for improvements.
  • Defined the guiding principles for protecting sensitive data associated with payments, serving as a foundation for building a more comprehensive data protection framework for industry participants.
  • Inventoried current industry efforts to share information for fraud and risk prevention and mitigation.

Other important accomplishments included in the progress report stem from efforts to enhance payment system efficiency through work on standards, directories and business-to-business payment improvements. In addition, joint efforts with industry participants have accelerated plans to implement the financial messaging standard ISO 20022 for U.S. wire transfer systems and widespread same-day ACH (automated clearing house) settlement.

For a full summary of our 2016 accomplishments and insight on what’s to come in the year ahead, we invite you to read our Strategies for Improving the U.S. Payment System – January 2017 Progress Report.

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Find out How Industry Collaboration Leads to Progress in our Latest Webinars

We are hosting two webinars that discuss how industry collaboration over the last year has led to substantial progress on the initiatives outlined in Strategies for Improving the U.S. Payment System. The first webinar will give you an overview of the industry progress made over the past year, while the second webinar gives an in-depth look at the Faster Payments Effectiveness Criteria developed by the Faster Payments Task Force.

Webinar 1 – Progress Report: In Pursuit of a Better Payment System

Date/time: March 21, 1:00 p.m. – 2:00 p.m. ET or April 7, 11:00 a.m. – Noon ET
Topics discussed:

Webinar 2 – Faster Payments Effectiveness Criteria: What’s Next?

Date/time: March 23, 3:00 p.m. – 4:00 p.m. ET or March 30, Noon – 1:00 p.m. ET
Topics discussed:

Find more details on these events and other education offerings, including how the Federal Reserve is making strides to adopt ISO 20022 in the U.S. for wire transfer systems as well as previous event summaries and recordings, by visiting Fed Events. Ready to join us? Register now for the Progress Report: In Pursuit of a Better Payment System and/or Faster Payments Effectiveness Criteria-What’s Next? webinar(s).

A Year of Progress: Celebrating the Anniversary of Strategies for Improving the U.S Payment System

Last week, we celebrated the first anniversary of Strategies for Improving the U.S. Payment System, a multi-faceted plan to enhance the speed, safety, and efficiency of the U.S. payment system. Over the past year, we have seen the strategies and tactics included in the plan come to life through broad, unprecedented stakeholder collaboration. Of note, two stakeholder task forces, one focused on faster payments and the other focused on payment security, were formed with representation from all payments system stakeholders – a major milestone in the payments improvement initiative.

The Faster Payments Task Force, established to identify effective approaches for implementing safe, ubiquitous, faster payment capabilities, made progress towards this goal through the development and approval of the Faster Payments Effectiveness Criteria. Released today, these criteria describe stakeholder aspirations for a future faster payments system and provide guidance to the payments marketplace for developing and assessing faster payment solutions.

To support the strategy of reducing payment fraud and advancing the safety, security and resiliency of the payment system, we established the Secure Payments Task Force. This Task Force has identified payments security issues for action, including payment identity management, data protection, law and regulatory coordination, and information-sharing to reduce payment risk and fraud. In addition, the Secure Payments Task Force contributed to development of the security-related Faster Payments Effectiveness Criteria.

Efforts to enhance payment system efficiency through work on standards, directories, and business-to-business payments improvements have also been realized through collaboration. In joint efforts with industry stakeholders, we announced a high-level plan to implement ISO 20022 for U.S. wire transfer systems, designed a technical proof of concept for a business-to-business directory, and advanced plans to implement ubiquitous same-day ACH.

Read our February 2016 Progress Report and hear more about the Federal Reserve’s vision for the future U.S. payment system in video interviews with Esther George, President and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the payments improvement initiative, and Jerome Powell, Federal Reserve Board Governor and co-chair of the initiative’s oversight committee.

It’s not too late to join our payments improvement efforts. Engage today to learn how you can add your voice to designing a faster, safer, more efficient payment system.